Third day of shutdown overshadowed by looming debt trouble

Efforts to resolve the government shutdown were at a standstill Thursday as President Barack Obama and House Speaker John Boehner traded barbs, the Treasury warned of a dire risk to the economy ahead and work in the Capitol was briefly halted because of gunshots outside.

U.S. Capitol police put the entire complex under lockdown for about a half hour after a police officer was injured in the shooting outside. Witnesses said the shooting appeared to unfold after police chased a car up a nearby street. The House was forced into recess in the midst of considering bills to restore funding to select parts of the government. Senate Democrats and Obama have rejected that piecemeal approach.

As the shutdown dragged into its third day, worries deepened about another disagreement brewing between Republicans and Democrats over the next two weeks. The Treasury Department warned on Thursday that that a deadlock over raising the nation’s debt limit could touch off a new recession even worse than the last one, from which Americans are still recovering.

Washington’s shutdown showdown grew more personal Thursday.

Speaking at a construction company in Washington’s Maryland suburbs, Obama cast the House speaker as a captive of a small band of conservative Republicans who want to extract concessions in exchange for passing a short-term spending bill that would restart the partially shuttered government.

“The only thing preventing people from going back to work, and basic research starting back up and farmers and small business owners getting their loans, the only thing that is preventing all that from happening right now, today, in the next five minutes is that Speaker John Boehner won’t even let the bill get a yes or no vote because he doesn’t want to anger the extremists in his party,” Obama said.

Boehner answered by batting blame back toward Obama and his “my-way-or-the-highway approach.” Boehner said that if the president would negotiate to fix flaws in “Obamacare,” the shutdown could end.

“The president’s insistence on steamrolling ahead with this flawed program is irresponsible,” said Boehner, R-Ohio.

Majority Leader Eric Cantor said the House would continue on its course of passing separate bills to remedy “situations that are in critical stages” because of the partial government shutdown that began Tuesday.

The first, to provide pay for National Guard and Reserve troops, passed 265-160, before the House session was interrupted.

House leaders also planned a vote on restoring money to veterans programs, and officials said legislation to help Head Start and possibly the Women, Infants and Children, or WIC, program could soon be drafted, as well.

Senate Democrats made clear they will not agree to reopen the government on a piecemeal basis. “You can’t fall for that legislative blackmail or it will get worse and worse and worse,” said Sen. Chuck Schumer of New York.

Senate Democrats and Obama said the House must send them a measure that would restart all of government with no strings attached.

“Take a vote,” Obama urged Boehner in his speech. “Stop this farce and end this shutdown right now.”

It might not be so simple, however. Moderate Republicans have said they think they could provide enough votes to join with minority Democrats and push a bill through the House reopening the government with no restrictions on the health care law.

But under pressure from House GOP leaders, they failed to join Democratic efforts on Wednesday aimed at forcing the chamber to consider such legislation.

In the Senate, GOP Leader Mitch McConnell of Kentucky said the problem was “Democrats’ refusal to apply simple fairness when it comes to Obamacare.”

Democratic and Republican leaders in the Senate blocked each other’s proposals for addressing the stalemate Thursday. Democrats rejected GOP proposals to reopen the national parks, speed up processing of veterans’ claims and restart some medical research that’s been put on hold. Republicans stymied a Democratic plan to bring the entire government back to work.

“Obviously tea party Republicans don’t really want a way out of this government shutdown. They like it the way it is,” said Senate Majority Leader Harry Reid, D-Nev.

Republicans who initially sought to defund the health care law in exchange for funding the rest of government have scaled back their demand but say they need some sort of offer from Obama.

A meeting between Obama and congressional leaders at the White House Wednesday evening offered no glimmer of progress.

“All we’re asking for here is a discussion and fairness for the American people under Obamacare,” Boehner said after the meeting.

The White House said Obama would be happy to talk about health care — but only after Congress moves to reopen the government.

If the shutdown dispute persists it could become entangled with the even more consequential battle over the debt limit. The Obama administration has said Congress must renew the government’s authority to borrow money by Oct. 17 or risk a first-ever federal default, which many economists say would dangerously jangle the world economy.

Treasury’s report Thursday said defaulting on the nation’s debts could cause the nation’s credit markets to freeze, the value of the dollar to plummet and U.S. interest rates to skyrocket.

For now, Republicans planned to continue pursuing their latest strategy toward the shutdown: muscling bills through the House that would restart some popular programs.

Votes were on tap for restoring funds for veterans and paying members of the National Guard and Reserves. On Wednesday, the chamber voted to finance the national parks and biomedical research and let the District of Columbia’s municipal government spend federally controlled dollars.

As the politicians battled, mail continued to be delivered, air traffic controllers remained at work and payments were being made to recipients of Social Security, Medicare, Medicaid and unemployment benefits.

Taxes were still due, but lines at IRS call centers went unanswered.

Halted were most routine food inspections by the Food and Drug Administration. Some loan approvals for many low- and middle-income borrowers were thrust into low gear by the Housing and Urban Development Department. National parks were closed.

Workers were furloughed based on how essential their jobs were to the nation: Only 3 percent of NASA employees were kept on, while 86 percent at the Homeland Security Department were working.

Underscoring the rising intensity of the partisan battle, the Senate chaplain opened Thursday’s session with an unusually pointed prayer.

“Deliver us from the hypocrisy of attempting to sound reasonable while being unreasonable,” said Dr. Barry Black. “Remove the burdens of those who are the collateral damage of this government shutdown.”

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